& Friends on Technology Policy

3 Ways the FCC Chairman is Reversing the 2010 Rules

There’s been a lot of talk about how FCC Chairman Tom Wheeler’s proposal for net neutrality will be a reversal of the FCC’s 2010 rules that were thrown out in court in January. Generally, the Chairman is claiming that he is doing the same rules just on more solid authority. In fact, he’s actually using the same weak authority (it’s called Section 706 of the Telecommunications Act) and watering downflat outreversing the rules.

It’s important to note that the Chairman is proposing reversing the good parts of the FCC’s 2010 rule, not the bad parts. Because the last FCC Chairman negotiated a compromise for the 2010 rule, there’s some good stuff in there and some terrible stuff. This Chairman is keeping the bad stuff.

Here are a few positions he has taken, which are a reversal from the good stuff in the FCC’s 2010 order.

Permitting discrimination. The 2010 order had a rule against unreasonable discrimination for home internet access, but the Chairman is proposing enabling cable and phone companies to discriminate and provide fast and slow lanes and charge fees for them.

Authorizing access fees. The 2010 order explained that cable and phone companies want to be able to charge every website on the planet lots of money for reaching users or for priority service noting: “Although broadband providers have not historically imposed such fees, they have argued they should be permitted to do so.” The 2010 order prohibited the cable and phone companies from charging web companies fees merely to access users (and did so under the no-blocking rule) and also rejected fees for preferences (under the nondiscrimination rule), as the court thought important to note. Of course, the Chairman is now proposing access fees. He also has spoken at some length about why Netflix might be “allowed” to pay fees (as though Netflix wants to pay these fees, which is also how carriers wrongly talk about it) for priority and why he thinks it would be a good thing (based on assumptions rejected in the 2010 order–that the marketplace will sort it out). (Barbara van Schewick has written a more detailed explanation of this point, and it will be worth reading.)

Only targeting anticompetitive actions or those causing consumer harm. The Chairman has been defending himself by claiming that “behavior harmful to consumers or competition by limiting the openness of the Internet will not be permitted.” Apparently, FCC officials told media the same thing: FCC officials “say that proposed priority deals wouldn’t be allowed if they harm consumers or decrease competition.” That sounds nice, but is exactly what AT&T, Comcast, Verizon want. It’s too limited. In fact, the FCC’s 2010 order specifically rejected this argument (paragraph 78): “We also reject the argument that only ‘anticompetitive’ discrimination yielding ‘substantial consumer harm’ should be prohibited by our rules.” Couldn’t be clearer. The order explains why.

We are persuaded those proposed limiting terms are unduly narrow and could allow discriminatory conduct that is contrary to the public interest. The broad purposes of this rule—to encourage competition and remove impediments to infrastructure investment while protecting consumer choice, free expression, end-user control, and the ability to innovate without permission—cannot be achieved by preventing only those practices that are demonstrably anticompetitive or harmful to consumers. Rather, the rule rests on the general proposition that broadband providers should not pick winners and losers on the Internet—even for reasons that may be independent of providers’ competitive interests or that may not immediately or demonstrably cause substantial consumer harm.

At the same time, the Chairman isn’t reversing the bad stuff in the 2010 order.

Mobile. For example, the 2010 order thought it was too early to adopt nondiscrimination rules for mobile access to the internet. Since 2010, mobile use has exploded, and there have indeed been violations of net neutrality on the mobile side, around the world and in the US. If anything, the Chairman should be making the 2010 order stronger–and filling this key gap. But all reports point to ignoring this problem with the order.